US Treasury Secretary Bessent says interest rates remain well above neutral and policy should not be restrictive; models suggest 2.5% to 3.25% for the FFR

• We are looking at a smaller fiscal deficit this year, between USD 300-500bln.

This statement from Treasury Secretary Bessent suggests a continuation of a hawkish stance, indicating that current interest rates are still above what is considered neutral. Moreover, the fiscal deficit projection hints at a potential easing of fiscal pressure, which may influence the Federal Reserve's considerations regarding future monetary policy adjustments and interest rates.